Renewable Energy Credits

Renewable Energy Credits (RECs) are tradable commodities which represent proof that 1 megawatt-hour (MWh) of electricity was generated from a renewable energy resource. A green energy producer is credited with one REC for every megawatt hour of electricity produced. Each REC is coded with an identification number to ensure that it is not double-counted. Renewable energy produced is fed into the electrical grid, but the REC associated with that energy can be sold separately. An entity that desires to use renewable energy and reduce carbon emissions can purchase a REC from the energy producer and claim the emissions reductions associated with it. The purchaser only receives the REC, not the energy produced. RECs create incentives for carbon-neutral renewable energy by creating a commodity separate from the energy produced which in effect subsidizes renewable electricity generation. Renewable energy credits are fraught with controversy as to whether they actually create incentives for additional renewable energy, and we at EcoShift have the experience to determine REC fact from fiction.